And why classification as a garment vs. a blanket mattered a lot.
Snuggies wants to be sure that you think it is a blanket. The reason takes us to U.S. trade policy.
The Snuggie:
A Blanket Rule
When Snuggies were first imported from China, U.S. customs officials called it a garment. Disagreeing, Snuggies said it was bringing blankets into the country. The name mattered because of the Tariffs create perverse incentives.
But Snuggies’ importers believed it should have gotten the 8.5% blanket duty. On its box, the Snuggie label said, “a blanket with sleeves.” Similarly, its trademark application referred to fleece blankets and throws.
During February, a U.S. Trade Court agreed with Snuggie. Saying U.S. customs officials were wrong, the Court told us that the Snuggie was a large piece of “fabric providing a warm covering.” It was a blanket.
Our Bottom Line: Incentives
Tariffs can create perverse incentives. In 1882, we got brown sugar when white sugar imports were taxed. One hundred years later, the U.S. government tried to protect Harley Davidson through a Reprinted from Econlife.